Earning $120,000 per year might make a $1 million retirement seem like a far-off dream. However, with commitment and a solid strategy, achieving this goal is within reach.
Financial experts often recommend saving between 10% to 15% of your salary for retirement. But if you’re aiming for $1 million, the percentage you need to save varies greatly based on your starting age.
CNBC has calculated the figures, guiding you on the proportion of your $120,000 income to allocate for retirement savings.
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These calculations are under the assumption that you plan to retire at 65 and are starting with zero savings.
Financial advisors generally advise a gradual shift in your investment portfolio towards more conservative assets as retirement nears. For these projections, we’re assuming a 6% average annual return on investments. Factors such as inflation, taxes, salary increments, or other life variables aren’t accounted for in these calculations, so it’s crucial to plan with these considerations in mind.
To discover the specific savings rate you need to reach your million-dollar retirement, watch this video.